Almaden-Santa Clara Vineyards v. Paul

• Decision Date: 03 February 1966
• Docket Number: ALMADEN-SANTA
• Citation: 49 Cal.Rptr. 256,239 Cal.App.2d 860
• Court: California Court of Appeals Court of Appeals
• Parties: CLARA VINEYARDS, a corporation, dba Almaden Vineyards, Plaintiff and Respondent, v. Charles PAUL, Director of Agriculture, State of California, and Philip J. Vogel, dba Vogel Farms, Defendants and Appellants. Civ. 22360.

Page 256

49 Cal.Rptr. 256

239 Cal.App.2d 860

ALMADEN-SANTA CLARA VINEYARDS, a corporation, dba Almaden Vineyards, Plaintiff and Respondent, v. Charles PAUL, Director of Agriculture, State of California, and Philip J. Vogel, dba Vogel Farms, Defendants and Appellants.

Civ. 22360.

District Court of Appeal, First District, Division 1, California.

Feb. 3, 1966.

Thomas C. Lynch, Atty. Gen., of State of California, Walter S. Rountree, Asst. Atty. Gen., Donald H. Maffly, Deputy Atty. Gen., San Francisco, for appellant Charles Paul.

Utley & Houck, Los Angeles, for appellant Philip J. Vogel.

Wallace, Garrison, Pascoe, Norton & Ray, San Francisco, for respondent.

SULLIVAN, Presiding Justice.

This is an appeal by Charles Paul, Director of Agriculture of the State of California (Director) and Philip J. Vogel, doing business as Vogel Farms (Vogel) from a judgment of the trial court ordering the issuance of a peremptory writ of mandate commanding said Director to set aside his order suspending the processor's license of Almaden-Santa Clara Vineyards, a corporation doing business as Almaden Vineyards (Almaden), respondent herein and petitioner below.

Almaden is engaged in the business of selling wine and is duly licensed as a processor of farm products pursuant to Division VI, Chapter 9 of the Agricultural Code (§§ 1299.18-1300.9i). ¹ Vogel is a producer of grapes in California.

On March 12, 1963, Almaden and Vogel entered into a contract in writing under the terms of which Almanden agreed to buy certain grapes of Vogel's to be grown during the 1963 season, the varieties and approximate tonnage of which were specified in the contract. The contract is a printed form with blank spaces provided for the insertion of the varieties, tonnage and price of the grapes. These were filled in by hand-printing and contained the following hand-printed provision: 'Buyer agrees to pay Seller a minimum price of [$]40.00 per ton subject to provisions of federal marketing order on grapes.'

Attached to the face of the document as a part thereof was the following typewritten provision: 'Price will be determined later this season by mutual agreement between buyer and seller. In case of disagreement, price will be the average price paid by wineries in the San Joaquin Valley for like varieties as quoted by the Weekly Federal Marketing Reports for 1963. After agreement, the price shall be entered on the contract and initialed by buyer and seller.'

During September and October 1963 Vogel delivered to Almaden the grapes called for by the contract and Almaden paid Vogel therefor the sum of $119,545.15. These payments were made on the basis of prices quoted for the varieties of the grapes in the Federal Marketing News Service 'San Francisco Weekly Wine Report' as the prices paid by wineries in the San Joaquin Valley. ² Almaden took the position that this was payment in full for the grapes; Vogel, on the other hand, claimed that he was entitled to receive a minimum price of $40 per ton on all varieties sold. If Vogel was right, he had in fact received $23,340 less than he was entitled to.

Upon being refused this amount, Vogel on December 24, 1963 filed with the Department of Agriculture, Bureau of Market Enforcement pursuant to section 1300.4, ³ a verified complaint alleging in substance that Almaden in violation of section 1300.4a ⁴ had 'failed to pay [Vogel] in full for grapes at the time and in the manner specified in the written contract with the producer, or within the time and the manner required by Chapter 9, Division 6, of the Agricultural Code.' On the basis of said complaint, the Director issued a notice of time and place of hearing and, through his Chief, Bureau of Market Enforcement, an order to show cause why Almaden's license should not be suspended or revoked.

The dispute between Almaden and Vogel over the payment of the grapes leading to the instant proceedings centered upon that portion of the contract providing for a $40 per ton minimum price 'subject to provisions of federal marketing order on grapes.' It was Vogel's position at the administrative hearing that the purpose of the minimum price provision was to afford him 'insurance against a very marked slump or drop in price' in the event of a very low setaside regulation or of no setaside regulation under the Federal Marketing Program; ⁵ that the grape purchase agreement had nothing to do with whether there was going to be a setaside or not; and that the minimum price being applicable only to the free tonnage would provide a floor for Vogel in any unstabilized market with no setaside. Almaden's position, on the other hand, was that under the contract provision it would be obligated to pay the $40 minimum price for the free tonnage of grapes if, but only if, a federal setaside order was in effect. The Director's position below was that the clause in dispute 'simply means that both parties must comply with the provisions of the federal marketing order on grapes'; that if both parties to the contract complied with all of the provisions of the federal marketing order, the $40 minimum would apply; that there was no contention by either party that the parties failed to comply with the order; and that Almaden erroneously interpreted the clause to mean that the minimum price specified was conditioned not only upon the existence of the federal marketing order but also upon the existence of a setaside regulation adopted pursuant to said marketing order.

The record discloses that the producers of grapes in July 1963, voting in a referendum required by the federal marketing order, favored the termination of the order after the third crop year ending June 30, 1964; that in August 1963 the Grape Crush Administrative Committee (see fn. 5, ante) recommended to the Secretary of Agriculture that the 'desirable free tonnage' of grapes for the 1963 crop year be the actual crush; and that as a result there was no surplus control and therefore no 'setaside' on 1963 crop year grapes under the Federal Grapes for Crushing Marketing Order.

On January 23, 1964, the complaint filed by Vogel with the Director came on for hearing at Fresno before H. S. Cann, Chief of the Bureau of Market Enforcement of the State Department of Agriculture. The hearing was held under and pursuant to the authority of Division VI, Chapter 9 of the Agricultural Code. Evidence was received ⁶ from both Vogel and Almaden concerning the circumstances under which the agreement was made, including those pertinent to the federal marketing order and setaside orders just discussed. At the request of Almaden's counsel, the hearing officer took official notice of the Federal Grapes for Crushing Marketing Order in effect for the 1963 crop year.

On March 6, 1964 the hearing officer issued his Findings of Fact and Order. He found in substance that at the time of the Vogel-Almaden contract, and at all material times thereafter, the Federal Grapes for Crushing Marketing Order (see fn. 5, ante) was in full force and effect; that under said order there was no surplus control or setaside for 1963 crop year grapes; that between the time such last fact became known (approximately August 15, 1963) and the time of delivery of Vogel's grapes, 'no attempt was made by respondent to modify or clarify the contract in view of the fact that there would be no set aside during the 1963 crop year'; and that the prices for the grapes set forth on Almaden's statements (see fn. 2, ante) 'are different from and less than the minimum price as set forth in the contract * * * and are not acceptable to complaint as payment in full.' From such findings the hearing officer concluded that Almaden 'has violated Section 1300.4a(a) of the Agricultural Code, in having failed and neglected to make payment in full' and that discipline should be taken against Almaden's license and ordered that said license 'be and the same is hereby suspended from March 31, 1964 to the expiration date thereof, namely, January 14, 1965.' ⁷

On April 24, 1964 Almaden filed in the court below a Petition for Alternative Writ of Mandate against both the Director and Vogel. On May 14, 1964, after argument by counsel for Almaden and the Director, the matter was submitted on Almaden's petition, the return thereto and the record of the administrative proceedings for the Department of Agriculture without the court receiving any additional evidence. ⁸

The trial court, after finding that the amount paid by Almaden to Vogel for the grapes was approximately $23,000 less than would be due if calculated on a $40 per ton minimum price, made the following crucial finding: 'IX That the handprinted provision [quoted supra] contained in said contract * * * is ambiguous in its terms. That a bona fide dispute arose and still exists between petitioner and respondent Vogel as to the interpretation of this provision and the other price provisions of the contract. That under said circumstances, the finding of respondent, Charles Paul, Director of Agriculture, that petitioner failed and neglected to make payment in full in accordance with the terms of said contract within the meaning of section 1300.4a(a) of the Agriculture [sic] Code of the State of California is not supported by the weight of the evidence and the suspension of petitioner's license was a prejudicial abuse of discretion.' (Emphasis added.) ⁹ From these findings the court concluded that Almaden was entitled to a judgment for the issuance of a peremptory writ of mandate commanding the Director to immediately set aside his order suspending Almaden's license. Judgment was entered accordingly. It is from this judgment that the Director and Vogel have taken their separate appeals.

The principles defining the respective functions of the trial court and of this court are well settled. Since the Director of Agriculture is a state officer conducting a statewide agency (§§ 20, 21) and carrying out statutory powers only, the trial court was...